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Top tips on starting a vehicle transporting business

So, you want to start your own vehicle transporting business? You’re probably feeling both excited and anxious to get things going. The prospect of leading a successful business in an industry you know well is a dream for many – but getting to that point takes some serious groundwork. Thankfully, we’re here to provide you with some information on how to set up your business.

The good news is, so long as you are experienced in the transport field, you should feel confident that this is a venture you can master. Plus, there are all kinds of businesses and consumers that call on companies who can safely and securely transport cars and other vehicles between locations. You’ve got car dealerships, auctions and recovery, to name just a few on the list, so you know that there is demand out there.

As motor trade insurance specialists, we have a wealth of knowledge in this area that can help you to turn your ideas into an actual business. We can also compare motor trade insurance policies from leading providers on your behalf, setting you up with cover that suits your budget and unique business requirements.

Read on to discover some of our top tips to assist you on your journey – from the licences you need to the best ways to market a transportation business.

Research competitors

Competitor research is a good place to start when launching any business. Do some digging into what other vehicle transporting companies charge, what niche they fulfil, what distances they cover, where they advertise and so on. The more you can find out, the better!

Feel free to go beyond your direct competitors and delve into the broader transport sector too. It can only be helpful to understand the motor trade industry as thoroughly as possible.

This stage will really help you to mull over what kind of auto transporting services and business you want to run. You can also think about what you would emulate from other businesses and how your services could fill gaps in the market within your local area. That way, you can find your niche and hopefully avoid too much direct competition, which should ensure a good foundation for success.

Make a business plan

After that initial research, you should have a clearer idea of what you want your own vehicle transporting business to look like. From here, you can draw up a business plan. Although this can be daunting if it’s the first business plan you’ve ever created, it’s not as intimidating as it sounds.

There are plenty of sites where you can find guidelines on what to include, like this one by StartUps.co.uk. Some examples of sections would be your objectives, a marketing plan (more on this later) and financial projections, from the first few months right up to three years ahead or even further. It will also be a chance to outline what your USPs will be and why it’s a timely endeavour.

Not only does creating a business plan ensure you have an orderly plan to follow and targets to aim for, but putting everything down on paper will be the first test of whether your ideas are actually feasible. Now is the time to foresee potential issues and iron them out, before you start throwing your time, money and energy into building up the business.

It’s also worth noting that your business plan can change over time, so don’t be afraid to adapt it as your company grows and evolves. You’re not going to have predicted every twist and turn of the business in that initial plan, and tweaking as you progress is completely normal and expected.

Get the correct licences

From car dealers to freight companies, any type of transport business needs to have commercial licences.

As an auto transporting business, you’re going to be carrying substantial weight. In the UK, there is an operator’s licence that is specifically for vehicles over 3.5 tonnes in gross vehicle weight that will be carrying goods. Applying for one of these must be done through the DVLA. There is a whole section on the government website with all the information about the steps to follow for obtaining the correct vehicle operator licence.

Failure to get the right licence can cause you all kinds of problems in the future. Get it done and dusted and you’ll never have to worry about potential detrimental regulatory action, such as suspension of your operations or permanent removal of your licence, being taken against you.

Choose the best insurance cover

As you’ll be aware, motor trade insurance (also referred to as traders insurance or traders car insurance) is essential for running a vehicle transporting business. This covers any business and its employees that drives or takes care of vehicles as part of their services.

For vehicle transporting companies specifically, a minder insurance policy is what you’ll need, which is designed for companies dealing with customer vehicles. You might also need to consider fleet insurance if you’re planning to have a group of transporter vehicles. One of our advisors is always willing to listen to your business’ requirements and recommend the most suitable policy. Get in touch if you want to speak to us.

Raise the capital

To cover the costs of starting your new vehicle transporting business and getting it off the ground, chances are you’re going to need to raise some capital in addition to your own pot of money. You will have vehicle costs, staff payroll, insurance, marketing and a long list of other overheads to finance, after all.

This one of the key reasons why it’s critical to have a business plan and ensure it’s up to scratch. You’re going to rely on it to prove to potential investors that your company is credible and profitable, as well as convince them you’re a savvy businessperson. So long as you’ve done the maths and know you have a solid plan for turning the investment into profits, you will be in a good position to the raise the capital that’s needed.

Who can you turn to for investment? Well, there are multiple options, from friends and family to angel investors and your bank. While someone you know personally always comes with the risks associated with mixing business and pleasure, a private investor can inject capital into your business but usually in return for a small portion of equity. Ideally, they’ll be someone with a lot of experience in the automotive sector, so they can add value with their industry knowledge too.

Another option you can look into is small business grants. The lengthy application processes for these are definitely worth it for the payoff. With an extensive list of grants out there (see some of them here), the best tactic is to spend a lot of time researching which ones most closely align with your business, then take immense care over the applications. A few carefully selected and completed applications will be much more fruitful than a scattergun approach.

Up-to-date documentation

As well as your licences, you will need up-to-date documentation and certificates for your new auto transporting business. Speak to a legal professional about drawing up any necessary contracts related to transporting vehicles and also get contracts made up for any employees.

If you’re planning to move vehicles in and out of the UK, there is an extra level of documentation to think about, as you’re required to get your international road haulage documents sorted, too. These include an international driving licence, your Driver Certificate of Professional Competence (CPC) card, and an international driving permit. Once again, there is information on how to apply for these on the government website. Don’t get caught out by forgetting about your passport and visas either!

Decide on a location

Where you set up shop will link closely to what services you’re offering and, of course, how much space is required for your fleet or the vehicles in your care. You want quick, easy access to major routes that easily link up with where your customers will be based, whether that’s for local pickups of broken-down cars or for easily getting out of your local area and onto motorways across the country.

The site itself will need to be large enough for loading and unloading any haulers, so make sure it’s roomy enough and if possible, offers a bit of space for growth. It’s always nice to give yourself the opportunity to expand, provided that it is within your budget.

Source your equipment

Equipment is going to be important to the quality of service you provide, so give it the thought and consideration it deserves. You should have already decided how many haulers or towing trucks you’ll be buying in your business plan, plus equipment like winches, trailers and tie-down straps. At this point, it’s about finding the right pieces at the right price. Once again, research is crucial and speaking to others in the industry can be really handy to get some second opinions before you buy.

Trucking software or transport management software is also something to consider when you’re arranging your equipment. This can be helpful for everything from keeping track of mileage and fuel tax to recording hours on the road and mapping routes. All of this and the other features could make your business admin a lot easier as well as refine your services and save you money.

Network

As mentioned above, connecting with others in the transport industry is often a useful way to pick up advice and become savvier about business. So, it’s always worthwhile to try to reach out to other people in your local area and beyond, as well as online through Facebook groups, forums and LinkedIn.

One way to build up business through networking is to get in touch with vehicle transport brokers who work with subcontractors. They might take you on as a subcontractor and provide you with jobs, either as a long-term arrangement or more ad-hoc.

Start advertising

Now you have everything in place to get your business going, it’s time to think about how you market a vehicle transporting business. Any advertising will massively depend on your niche and the target audience within that. Are you looking to reach organisers and attendees of vintage car auctions or maybe car dealerships in your region? Once you’ve defined your audience, you can assess the best channels for targeting them.

A Facebook presence is essential for any business nowadays and the highly-targeted paid advertising on there can help you place your posts in front of the right people. Google Ads should also be on your advertising radar and can be extremely effective if you have enough budget to put behind it.

Don’t forget to set up your Google Business listing and keep it up to date. A website might be worthwhile as a long-term investment but isn’t actually a necessity while you are starting out, so long as you’re maximising your use of other channels correctly and effectively.

Traditional media shouldn’t be forgotten, either. A press release announcing your new business in key motor and vehicle trade publications is a great starting point for your marketing, as well as traditional adverts in the press and other media like radio. Then there’s always word of mouth, which is still important today, as are great reviews. Always encourage customers to leave you a good review on Facebook or Google.

Get a quote

In addition to all of the advice we’ve shared above, we’re here to help with one step of your business journey directly: your motor trade insurance.

It doesn’t matter what stage of setting up a vehicle transporting business you’re at or what your budget is, you can chat to us about your motor trade insurance needs. We will personally assess how we can meet them and what policy is going to work for your new company.

Fill in our enquiry form to get started or feel free to give us a call. Either way, our friendly team are ready to answer your questions and provide you with a quote for motor trade insurance today.